Problems in risk management practice confirm that risk management is a complex system Umang Tripathi Done well, it can be a very effective tool, but risk managers and management should be aware of the potential for failure: Failure in monitoring and managing risks, Failure in communicating risks to top management, Failure to take known risks into account, Mismeasurement of known risks, Failure to use appropriate risk metrics.

In addition to using quantitative measures like VaR, companies should also conduct stress testing and scenario analysis to provide a more rounded and comprehensive risk assessment. Stress testing involves subjecting the company’s financial positions to extreme movements in critical variables. Scenario analysis involves modelling a combination of events (eg, changes in exchange rates, interest rates, and commodity and asset prices) to capture the interactions within and between markets.

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The ability to make risk scenario simulations is a profoundly helpful way for company leadership to engage in risk management. ― Hendrith Vanlon Smith Jr,

CEO of Mayflower-Plymouth

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Reference: Stulz, R M (2008) ‘Risk Management Failures: What Are They and When Do They Happen?’, Journal of Applied Corporate Finance, 20(4), 58-67.

The short answer is that the MAJOR issue in Risk Management is the failure of Senior Operations Management to act on the recommendations and implementations indicated by the risk analysis and mitigation studies! No matter how good your analysis is (and they vary too, of course), it does not result in reduced risk if the actions are not executed.

Adding to the answers above, all fair points, Scalability is another roadblock, lack of resource commitment, budget, and absence of automation, results in manual workarounds and stretch assignments for analysts in Risk management.

Quantitative analysis is very challenging since accountable executives determine asset value and risk, organization context is a key input as well and these factors are not easy to quantify.

Umang Tripathi - I have been in this field for around 14-15 years, and have short articles published, feel free to review them and see if there is a problem statement in there or a solution for your research.

The most important issues that analysts face in risk management are cost, time, and potential results or effects.